Reef Subsea UK, operating from a head office in Stockton-On-Tees, County Durham with vessel mobilisation at the Port of Blyth, Northumberland, has fallen into administration resulting in the loss of 43 jobs.
The Company that provides marine trenching services to the offshore wind and oil & gas markets, had 70 employees and a turnover of £99 million in 2014.
Dan Butters and Adrian Berry of Deloitte, the business advisory firm, were appointed administrators to Reef Subsea UK March 3, 2015.
According to Deloitte, Of the 70 employees, 16 were given notice prior to the administrators appointment, and a further 27 redundancies have since been made.
The Company is part of a larger Norwegian group which itself entered a local insolvency process in early February 2015, following which the directors urgently sought to secure a sale of the Company or its business.
However, the directors appointed administrators on March 3, 2015 in order to protect the position for all stakeholders.
Dan Butters commented: “Following the bankruptcy of the wider group, the directors have sought to secure the survival of the business. These efforts are ongoing whilst the Administrators trade the business but unfortunately we have had to make a number of redundancies today in order to reduce ongoing costs. Our specialist team is supporting those employees affected.”
Commenting on the latest news about Reef Subsea, Neil Gordon, chief executive of Subsea UK, said:“This disappointing news will regrettably not be the only casualty in the oil and gas industry in the months to come. Companies which are highly leverage with capital intensive strategies and high cost assets will be most affected. Those who can move quickly to respond to the current challenges will find and capitalise on opportunities.
“The whole sector must come together to drive costs down to more sustainable levels and increase efficiency and innovation. The UK subsea industry is globally recognised for its expertise, technology and entrepreneurialism. We must now use these strengths to adapt and innovate to meet the current challenges presented by the decline in oil price and to ensure sustainable growth in the long-term.”